By Chibuzor Alli
Interswitch and its banking partners are seeking to make smartphones a more central tool for everyday payments as they push tokenised transactions that allow customers to pay by tapping compatible devices on payment terminals.
The move is aimed at reducing the multiple steps involved in conventional bank transfers and expanding the use of contactless payments across retail and other everyday services.
Speaking at an Interswitch tokenisation documentary press briefing in Lagos, the Managing Director for Payment Processing and Switching at Interswitch Purepay, Akeem Lawal, said the next phase of payment adoption could be centred on simply tapping a device.
“Where we are going is just tapping,” Lawal said.
Under tokenisation, a customer’s sensitive card information is replaced with a unique substitute identifier known as a token. This reduces the need to expose the original card credentials during transactions.
With compatible phones, smartwatches and payment terminals, users can authenticate transactions through features such as fingerprints or facial recognition before completing a payment.
“You will have reduced the friction of transacting significantly,” Lawal said, adding that biometric authentication could enable customers to complete transactions in fewer steps.
The technology is expected to change the experience of customers who currently rely heavily on bank applications for payments.
Rather than opening an app, entering an account number and going through several stages to complete a transfer, customers using supported tokenised devices could authenticate and tap at a payment terminal.
Lawal said the development builds on previous changes in Nigeria’s payments ecosystem, including interbank ATM switching, point-of-sale transactions and online payments, which have progressively changed how Nigerians access and move money.
The proposed shift could also take contactless payments beyond shops and conventional payment points.
The Executive Director at Wema Bank, Tunde Mabawonku, said smartphones could become useful payment tools in settings such as public transportation and international travel.
“This same phone, I should look to tap to make payments on the BRT bus. I should look to tap to make payments on the blue line, the red line,” Mabawonku said.
Beyond smartphones, the contactless system could support smartwatches and other compatible wearable devices, potentially giving consumers more options for making payments without physical cards or lengthy transfer processes.
For banks, the opportunity is also tied to changing consumer behaviour as more customers become accustomed to digital transactions.
The Head of the Digital Banking Division at GTBank, Jimmy Banjoko, said Nigeria was still at an early stage of adoption but that existing market behaviour pointed towards growing interest in contactless payments.
“We see that is a signal to suggest that innovation can go in this line because market behaviour is already tending towards this contactless,” Banjoko said.
He said tap-to-pay transactions could gain wider acceptance as consumers increasingly move away from app-based payment processes, although the pace of adoption will depend on implementation and customer acceptance.
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